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A state agency says in a new report that LADWP officials knew there were problems with its billing system but rolled it out anyway. Joel Grover reports for the NBC4 News at 5 p.m. on March 11, 2015. (Published Tuesday, March 10, 2015)

The California State Auditor is blaming LADWP for billing problems that have overcharged some of its customers — something the NBC4 I-Team uncovered in February.

A report released by the state’s watchdog agency Tuesday comes just days after LADWP and the City of Los Angeles announced billing errors were not the agency’s fault but that of a third-party contractor, PricewaterhouseCoopers, hired to consult on the new billing system DWP purchased.

Last week the city filed a lawsuit blaming the billing errors on an outside consultant who helped roll out the billing software.

But the Auditor’s office claims DWP officials knew about problems with the new computerized billing system years ago, but rolled out the system anyway.

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The billing problem has plagued DWP since the system was first implemented. The agency has sent out incorrect bills to customers, sometimes inflated more than 300 percent.

The agency has claimed those mistakes are often generated by the new faulty billing software.

The Auditor's report released Tuesday claims otherwise, saying DWP officials knew there was a problem before it switched to the new system — a mistake that could cost the city agency more than $200 million to fix.

"The department's executive management was well aware of the significant problems associated with [the billing system], and yet made the questionable decision to launch the new system," the report concluded.

The DWP would not provide a representative to speak to NBC4 on camera, but the agency released a statement saying it "disagrees" with the state’s findings, still blaming the company responsible for delivering the software.

2015 Southern California Images in the News

"While we agree with the auditor’s recommendations, we disagree with the basis for making them," DWP's statement said.